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This research aims to investigate the relationship between investment efficiency and firm performance. Multivariate linear regression was used to test the research hypothesis. The statistical population was 112 companies listed to the Tehran Stock Exchange during 2012-2021 (1120 firm-year observations). The research results showed no significant relationship between investment efficiency and firm performance. However, the additional test showed a positive relationship between underinvestment and firm performance. On the other hand, there is a negative relationship between overinvestment and firm performance.
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